12 Guj govt PSUs fail to impress CAG

Ahmedabad, Mar 30 | Updated: Mar 31 2007, 07:40am hrs
The government of Gujarat may boast of huge influx of private investment in the state but it certainly can not do the same for state owned companies and corporations. Taking serious note of the poor financial performance of 12 public sector undertakings (PSUs) of the Gujarat government, the Comptroller and Auditor General of India (CAG) has asked the Gujarat government to either consider their closure or improve the performance of these PSUs.

CAG in its report for the year ended March 31, 2006 clearly states that even after the completion of five years the turnover of seven working government companies has remained less than Rs 5 crore in each of the proceeding five years as per their latest finalized accounts.

The seven PSUs include Gujarat Urban Development Company Ltd, Gujarat Sheep and Wool Development Corporation Ltd, Gujarat State Road Development Corp Ltd, Gujarat State Rural Development Corp Ltd, Gujarat Growth Centers Development Corp Ltd, Gujarat Minorities Finance and Development Corp Ltd, Gujarat Rural Industries Marketing Corp Ltd.

Similarly, CAG has also taken serious note of the fact that 5 PSUs including three working companies and two working corporations have been incurring losses for five consecutive years leading to negative worth. These PSUs are Gujarat State Land Development Corp Ltd, Gujarat State Handloom and Handicraft Development Corp Ltd, Tourism Corp of Gujarat Ltd, Working Statutory Corporations, Gujarat State Financial Corp, Gujarat State Warehousing Corp.

Considering the fact, the CAG report states in no unclear terms that in view of the poor turnover and continuous losses, the government should review or improve the performance of these 12 PSUs and consider their closure.

The government of Gujarat has 56 PSUs as on March 2006 and according to the latest finalised accounts, 25 working PSUs earned an aggregate profit of Rs 683.63 crore, out of which only two were working government companies and one statutory corporation declared dividend of Rs 8.08 crore to the state government. On the other hand, four government companies accumulated losses aggregating to Rs 162.54 crore, which was more than four times their aggregate paid up capital of Rs35.70 crore. The two loss incurring statutory corporations had accumulated losses of Rs 2,126.63 crore, which was more than two times of their aggregate paid-up capital of Rs 715.63 crore.